See car insurance quotes from our partners

Your information is kept secure.

11 factors that affect car insurance rates

Some factors that affect your car insurance premiums are your driving record, the coverages you choose, your deductible, your annual mileage, your credit score, and demographic factors such as age, gender, and ZIP code.

Headshot of Rachael Brennan


Rachael BrennanSenior Editor & Licensed Auto Insurance ExpertRachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and

Updated|8 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our editorial standards and how we make money.

Insurance rates often seem perplexing. How does a company decide that this is the right amount to charge you for car insurance? Is there anything you can do to change your rates?

Ready to shop car insurance?

While it may seem like your only option is to reduce your coverage limits or remove parts of your policy altogether, this isn’t the best way to save money on your insurance. Lots of factors affect your car insurance rates, which means there are many ways to reduce your auto insurance costs without skimping on coverage.

Key Takeaways

  • Each insurance company uses the same basic information to determine your rates, but they all have their own unique formulas for determining just how much of an impact each factor will have on your insurance prices

  • The types of coverage you choose can have a significant impact on your insurance rates

  • Having accidents or tickets on your driving record can cause your insurance costs to skyrocket

  • Insurance companies use demographic information to help determine your rates, including your age, gender, marital status, and your ZIP code

What factors impact the cost of auto insurance?

A number of factors affect car insurance costs, some of which are in your control and some of which are not. Each company uses the same basic information to determine your rates, but they all have their own unique formulas for determining just how much each of these factors will impact your insurance prices. 

Ready to shop car insurance?

1. Your policy

The types of coverage you choose can have a significant impact on your insurance rates. For example, carrying liability only insurance instead of full coverage can save you hundreds of dollars each year. However, it is important to carry enough coverage to protect yourself financially in case of an accident, which means you shouldn’t limit yourself to carrying the cheapest possible coverage. Although you should be aware that having more insurance or higher coverage levels will impact your premiums, you shouldn’t let that stop you from having enough insurance coverage to meet your needs.

2. Your deductible

One of the easiest ways to reduce the cost of full coverage insurance is to choose higher deductibles. A deductible is the portion you agree to pay towards repairing or replacing your vehicle when you file a claim. 

A lower deductible allows you to pay a small amount (or, with a $0 deductible, nothing at all) toward a claim, but it will cost you more money on your annual insurance rates. Choosing a higher deductible of $500 or $1,000 can reduce your rates, but you will be responsible for that amount of money if you file a claim in the future. Drivers who can’t afford to pay $500 or $1,000 out-of-pocket for a claim should choose a lower deductible, even if that means paying more for your insurance.

3. Your mileage

The more time you spend on the road, the higher your risk of being in an accident. This is why most insurance companies use your annual mileage to help determine your rates.

Rates based on mileage are often based either on your annual mileage or your daily commute. For example, someone who drives less than 7,000 miles in a year might be considered a low mileage driver with some companies, while someone who commutes less than 10 miles each way to work might be considered a low mileage driver to other companies. For drivers who don’t put many miles on their car, some companies offer a low mileage discount or policies that charge you per-mile instead of a traditional annual premium.

4. Your car

The type of car you drive can have a significant impact on your insurance rates. For example, some cars are popular targets for thieves or more prone to certain types of accidents, like single vehicle rollovers, which makes them more expensive to insure. There are also some vehicles that are much more expensive to repair or replace, like sports cars or luxury vehicles, which means they are more expensive to insure.

On the other hand, older vehicles that are less expensive to repair or replace can help you save money on car insurance. There are even some newer vehicles that come with safety equipment that can help prevent or reduce damage from accidents, like lane departure warning systems, that can help save you money on your car insurance.

There are multiple safety features that could potentially save you money on car insurance, including:

  • Lane departure warning systems

  • Air bags

  • Anti-lock brakes

  • Daytime running lights

Each company has their own system for safety discounts, so check with your insurance representative to see if your car has any safety features that could save you money on your car insurance.

5. Your driving record

This is one of the biggest factors in calculating your rates and, more importantly, one of the rating factors you can control. Having accidents or tickets on your driving record can cause your insurance costs to skyrocket, potentially raising your rates by thousands of dollars each year in some states.

Driving carefully and avoiding accidents or tickets is the best way to keep your insurance costs as low as possible, but there are other things you can do to improve your driving record. For example, if you do get a ticket, consider taking a defensive driving course to keep the ticket off of your record. 

You may also want to check your driving record to make sure any old violations have been removed so they aren’t impacting your insurance rates any longer. Typically, infractions should be removed from your driving record after three years, but check the laws in your state to see if they have a different standard for removing violations from your record.

6. Your credit score

Many states allow insurance companies to use your credit score to determine your insurance rate or, in some instances, allow them to deny, cancel, or refuse to renew your auto insurance. This means that raising your credit score can lower your insurance rate or get you accepted on a plan you otherwise would have been denied.

Some states prevent insurance companies from using credit as a factor in determining insurance rates or denying people coverage, including:

  • California

  • Hawaii

  • Maryland

  • Massachusetts

  • Michigan

  • Oregon

  • Utah

If you live in a state where your credit score does impact your insurance rates, your first step should be to get a free copy of your credit report and find out what has been reported. You can work with the three major credit reporting agencies (Experian, Equifax, and TransUnion) to correct any errors and take any necessary steps to improve your credit rating.

7. Your insurance history

Having continuous car insurance with no breaks in coverage is important to your insurance company. Having gaps in your insurance coverage makes you seem like a riskier driver, in part because insurance companies assume you didn’t stop driving during the time you were uninsured.

If you no longer need car insurance but you don’t want to have a gap in your coverage, you might consider buying a non-owner insurance policy.

Your insurance history also includes past claims, which can have a significant impact on your rates. If you have had an accident or other claim in the past three years, expect it to affect your insurance rates.

Demographic factors

Insurance companies use some demographic information to help determine your rates, including your age, gender, marital status, and your ZIP code.

1. Age

This is something most people are familiar with because of the extraordinarily high insurance rates for teenage drivers. A lack of experience behind the wheel means insurance companies charge much more for younger drivers (drivers under 25) than their adult counterparts. It isn’t just teens who are paying based on their age, though—adults see their rates go down slowly over time until they become senior citizens, at which point some insurance companies start raising rates for older drivers.

2. Gender

It isn’t just age you have to worry about; gender can also impact your insurance rates in almost every state. Some states have passed laws preventing insurance companies from rating based on gender, including:

  • California

  • Hawaii

  • Massachusetts

  • Michigan

  • North Carolina

  • Pennsylvania

3. Marital status

Insurance companies typically offer a discount or lower rate to married drivers. Their reasoning is that married drivers are likely to be more responsible behind the wheel. This may seem strange, but insurance companies have found that, statistically, married drivers have fewer accidents and tickets, which is why they pay lower rates than their single counterparts.

4. ZIP code

Where you live can have a surprising impact on your rates. Insurance companies track accidents, car thefts, and other claims by ZIP code, which means your insurance rates are partially based on the things that happen in your neighborhood. If your part of town has more stolen cars or an intersection that is well known for causing accidents, expect to pay more for your car insurance.

While moving out-of-state will obviously impact your insurance rates, moving just a block or two in one direction or the other could also change your rates if it puts you in a new ZIP code. 

Can you get a car insurance quote without submitting personal information?

While it is sometimes possible to get a general quote without submitting personal information, a quote that doesn’t use your personal information is not accurate and won’t be considered binding. As mentioned above, personal information like your age, credit score, ZIP code, and gender are all used to determine your rates, so without that personal information you can’t get an accurate quote.

What doesn’t impact your car insurance rates

There are some factors that cannot legally be used to set your rates, such as your race or your religion. There are also other things that, while they seem like they might be important, simply don’t factor into your insurance rates at all. 

For example, parents won’t see their rates impacted by their children until those kids are licensed to drive. And, though good students are eligible for discounts, the school they attend isn’t likely to affect their rates unless the university offers a group discount. Similarly, unless your employer offers a group discount through the company, your insurance company doesn’t care where you work. Non-moving violations (parking tickets, etc.) also don’t typically affect your insurance rates.

Also, the size of the company you purchase a policy from isn't likely to impact your rates. Some small insurance companies offer lower rates than their larger counterparts.

How to save money on car insurance

There are many ways to save money on car insurance, including:

  • Comparing quotes when you shop

  • Bundling your insurance policies

  • Taking advantage of discounts (good student discount, military discount, etc.)

  • Raising your deductible

  • Choosing a car that is cheap to insure

  • Improving your credit score

  • Cleaning up your driving record or taking a defensive driving course

You can also check with your insurance representative to see what else they can recommend to help reduce your insurance rates.

Frequently Asked Questions

What factors can increase your insurance rates?

There are many things that can increase your car insurance rates, including choosing higher levels of coverage, an increase in your annual mileage, buying a car that costs more to insure, getting a ticket, getting into an accident, or a drop in your credit score. Your insurance rates could also increase if you move to a ZIP code where cars are more likely to be in an accident or be stolen.

Who pays an insurance premium?

An insurance premium is the amount you pay for your auto insurance each year. An insurance premium is billed to the person who owns the policy, which is usually the person who owns the car or cars being insured. The person being billed is expected to pay the premiums on an insurance policy, but if that person collects money from everyone on the policy or a third party wants to pay someone’s premiums, the insurance company doesn’t have a problem with that.

Does engine size affect car insurance?

Engine size can absolutely affect your car insurance rates. A bigger engine usually means your car is more powerful, moving it into a higher insurance rate. This isn’t a hard and fast rule, however—smaller turbocharged engines are also more expensive to insure.

This all comes down to how likely you are to make a claim. A big, powerful engine or a turbocharged engine mean higher speeds and an increased likelihood of being in an accident or having your car stolen. The increased claim risk means insurance companies charge higher rates.

Does a DUI 5 years ago affect insurance?

A DUI typically stays on your driving record for three-to-five years, but this varies by state. Some places have laws that state a DUI stays on your record for up to ten years, while some insurance companies go back up to seven years on your driving record when determining your rates. Because this varies so much from place-to-place, it can be helpful to work with an insurance representative who is familiar with the laws in your state.